The more your website is popular, the better you will get ranked.
To calculate your link popularity, the search engines count all
the links of other websites that point to your website.

-
if no website have a link pointing to yours, your website will not
become very popular and it will not be well ranked on the search
engines.
- Conversely, the more other websites will have a link pointing
to yours, the better your website will become well ranked on the
search engines.

As you know, exchanging links
helps both sides in improving the traffic (by increased visibility,
and by extra scoring in major search engines counting number of
links as an important scoring factor).